The Fed held rates at 3.50 to 3.75%. Nobody was surprised. CME FedWatch had a hold priced at 100%. But this meeting isn't about the decision. It's about what comes after.

This is almost certainly Jerome Powell's last FOMC as chair. His term expires May 15. Kevin Warsh, Trump's nominee to replace him, just had his Senate hearing. He said all the right things about Fed independence, but the reality is simpler. The White House wants lower rates. Powell didn't deliver them. Now he's out.

The macro backdrop makes the transition ugly. March CPI came in at 3.3% year over year, the highest since May 2024. Gasoline is up 19% year over year. Brent crude is sitting above $110 with no clear path down while Hormuz stays closed. The Fed's own staff revised inflation projections higher and growth projections lower. That's the textbook definition of stagflation risk.

And the labor market isn't giving the Fed an easy out either. Jobs data looks resilient on the surface. Unemployment ticked down to 4.3%. But the labor force participation rate also dropped, meaning fewer people are even looking. Wage growth cooled to 3.5% year over year. Not hot enough to justify hiking, not weak enough to justify cutting.

So the Fed sits. Again.

Here's what matters for positioning. The market is pricing the earliest possible cut in September 2026. That's five months away. And even that isn't guaranteed. If oil stays above $100 and food prices start catching up to fertilizer costs, the inflation math gets worse, not better. The Fed's own projection says inflation accelerates through mid-2026 before pulling back in the second half.

The Warsh factor adds another layer. He's been described as a source of stability, but he's also a Wall Street guy stepping into a role where the president has publicly pressured the central bank to cut faster. Whether Warsh can resist that pressure while inflation is running hot will define the second half of 2026.

Powell leaves with rates unchanged and the hardest decisions still ahead. The next chair inherits an economy caught between an energy shock, sticky inflation, and a president who thinks borrowing costs are too high. Good luck.